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The Credit Guy

Credit card use rights die when the account holder does

Summary

Family members want to keep using their dead mother’s credit card — even though the issuer has closed the account. There are legal — and moral — issues here

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Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly “The Credit Guy” column, answering reader questions about credit counseling and debt issues.

Question for the CreditCards.com expert

Dear Credit Guy,
One of my parents died recently and one of her credit cards with an $11,000 balance was recently closed. Although the card was under her name only, our entire family was using it and would like to keep it and the available credit that remains on it. Would the credit card company allow us to keep the card/balance/available credit? And what is your best advice for credit card debt of parents and surviving adult children?  — Barbara

Answer for the CreditCards.com expert

Dear Barbara,
I’m not sure why your entire family would be using your mother’s credit card, but it sounds like a situation ripe for problems. Who decides whether a purchase should be made? Who pays the bill? And did your mother know her card was being used by everyone? Those are just a few questions that quickly come to my mind. Perhaps the entire family was using the card to make purchases for your mother, in which case once the estate is settled, you should no longer need to do so.

See related:What happens to credit card debt after death, Starting a credit life after a spouse’s death, How I dealt with my parents’ credit card debt after their deaths, 8 things cardholders should know about community property laws

All the possible scenarios aside, first let me answer your questions, and then I’ll give you my advice for moving forward. You state that the credit card issuer has closed the account. Since the account was in your mother’s name and she is deceased, it is unlikely that the card issuer will reopen the account. If your mother was solely financially responsible for the account, the card issuer would have no legal way to collect on the account.

As adult children, you and your siblings have no financial responsibility to pay your parents’ credit card debt unless you are named on the account as a financially responsible party. The surviving spouse may have some financial responsibility for his wife’s account if he lives in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin; Alaska has an “opt-in” community property law). I recommend that he check with an estate attorney. Generally, creditors of deceased persons can attempt to collect any balances due from the deceased person’s estate; however, without any assets, the debt dies with the person.

My advice for you and your siblings is to keep your credit lives separate from your surviving parent and from each other. If your father needs assistance with his financial life, you can certainly do what is necessary for him, but try to keep his accounts and purchases separate from your own.

For your mother’s closed account with the $11,000 balance, I would recommend that you send a certified copy of her death certificate to the creditor with a letter explaining that she left no estate with which to pay what is owed (if that is, in fact, the case). If your father needs access to credit, he should open a new account in his own name. If he is on a limited income and needs to increase his income, he could research the possibility of a reverse mortgage if he is a homeowner. I would not recommend that he use credit to extend his income unless he has a plan for how to repay what he borrows.

Take care of your credit!

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